After TRIPS: Can India Remain ‘the Pharmacy of the Developing World’?

Abstract

India has long played a key role in supplying low-cost pharmaceuticals to people in developing countries, gaining a reputation as ‘the pharmacy of the developing world’. Yet, changes to India’s intellectual property regime under the World Trade Organization’s 1995 Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement mean that India’s capacity to produce and supply affordable medicines has been undermined. We use a political economy approach to investigate the factors that are determining the future of Indian generic pharmaceutical companies as suppliers of affordable medicines in the ‘post-TRIPS’ environment. We argue that while there is some scope within this environment for legal safeguards to protect access to life-saving medicines, the future of the ‘pharmacy of the developing world’ is in question, not just because of the ownership rights awarded to multinational corporations (MNCs) under the TRIPS framework, but also because of the way the market system is tilted towards MNCs. MNCs can ‘play’ the system locally and across the world, including by exerting pressure on safeguards that India instituted to protect the affordability of medicines. Against this background, we explore the challenges faced by the Indian government in creating an environment that is more likely to ensure access to life-saving medicines.

Keywords:

• COVID-19
• generic drug manufacturing
• India
• intellectual property rights (IPRs)
• medicines
• MNCs
• pharmaceuticals
• right to health
• TRIPS

Acknowledgements

The authors wish to acknowledge the hard work of Professor Emerita Marika Vicziany, Vivien Seyler and the anonymous reviewers for South Asia contributing to this paper.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

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2. Médecins Sans Frontières, ‘At EU–India Summit, India Must Defend Its Pharmacy of the Developing World’ (29 Mar. 2016) [https://www.msf.org/eu-india-summit-india-must-defend-its-‘pharmacy-developing-world’, accessed 3 Oct. 2020].

3. Médecins Sans Frontières, ‘Untangling the Web of Antiretroviral Price Reductions’ (18th ed., 2016), p. 12 [https://msfaccess.org/utw, accessed 3 Oct. 2020].

4. P.J. Guerin et al., ‘The Consequence of Covid-19 on the Global Supply of Medical Products: Why Indian Generics Matter for the World’, in F1000Research, Vol. 9, no. 225 (2020), p. 3.

5. Ibid. Gavi provides vaccines to children in low-income countries [https://www.gavi.org/, accessed 22 Sept. 2020].

6. Gavi, ‘Serum Founder Wins Inaugural “Vaccine Hero” Award’ (11 Dec. 2018) [https://www.gavi.org/news/media-room/serum-founder-wins-inaugural-vaccine-hero-award, accessed 22 Sept. 2020].

7. W. Greene, ‘The Emergence of India’s Pharmaceutical Industry and Implications for the U.S. Generic Drug Market’, Office of Economics Working Paper no. 2007–05–A (Washington, DC: US International Trade Commission, 2007), p. 2.

8. ‘The World’s Pharmacy’, The Telegraph (19 April 2020) [https://www.telegraphindia.com/science-tech/the-worlds-pharmacy-some-facts-about-generic-drugs-answered/cid/1766282, accessed 16 June 2021).

9. The WTO allowed members a ‘period of grace’ before they brought their IP laws into conformity with TRIPS. For India, this was between 1995 and 2005.

10. Médecins Sans Frontières, ‘Lethal Monopolies—How Pharma Games the Patent System to Maximise Profits’, MSF, Technical Brief (2020), p. 2 [https://msfaccess.org/lethal-monopolies-how-pharma-games-patent-system-maximise-profits, accessed 24 Aug. 2020].

11. J. Stiglitz et al., ‘Patents vs. the Pandemic’, Project Syndicate, Vol. 23 (2020) [https://www.project-syndicate.org/commentary/covid19-drugs-and-vaccine-demand-patent-reform-by-joseph-e-stiglitz-et-al-2020-04, accessed 24 July 2020].

12. Ibid.

13. Ibid.

14. See, for example, T. Bazzle, ‘Pharmacy of the Developing World: Reconciling Intellectual Property Rights in India with the Right to Health: TRIPS, India’s Patent System and Essential Medicines’, in Georgetown Journal of International Law, Vol. 42 (2010), pp. 785–815; J.M. Mueller, ‘The Tiger Awakens: The Tumultuous Transformation of India’s Patent System and the Rise of Indian Pharmaceutical Innovation’, in University of Pittsburgh Law Review, Vol. 68. no. 3 (2007), pp. 491–641; and P. Ram, ‘India’s New “TRIPs-Compliant” Patent Regime between Drug Patents and the Right to Health’, in Chicago-Kent Journal of Intellectual Property, Vol. 5 (2006), pp. 195–206.

15. The Uruguay Round was the eighth round of multilateral trade negotiations (MTNs) conducted within the framework of the General Agreement on Tariffs and Trade (GATT), which resulted in the formation of the WTO in 1994.

16. P. Drahos, ‘Preface’, in P. Drahos and S. Mayne (eds), Global Intellectual Property Rights: Knowledge, Access and Development (New York: Palgrave Macmillan, 2002), pp. 1–9.

17. R.C. Dreyfuss, ‘TRIPS and Essential Medicines: Must One Size Fit All? Making the WTO Responsive to the Global Health Crisis’, in T. Pogge et al. (eds), Incentives for Global Public Health: Patent Law and Access to Essential Medicines (Cambridge: Cambridge University Press, 2010), p. 53; and J.A. Sellin, ‘Does One Size Fit All? Patents, the Right to Health and Access to Medicines’, in Netherlands International Law Review, Vol. 62, no. 3 (2015), pp. 445–73.

18. A. Kapczynski, ‘The Right to Medicines in an Age of Neoliberalism’, in Humanity: An International Journal of Human Rights, Humanitarianism, and Development, Vol. 10, no. 1 (2019), p. 81.

19. Ibid.

20. Ibid.

21. Ibid.

22. R. Rizal, ‘Patents versus People: The Battle over Generic Antiretroviral Drugs in India’, in Interdisciplinary Journal of Health, Ethics, and Policy, Vol. 8, no. 1 (2008), pp. 15–8.

23. U.S. Racherla, ‘Historical Evolution of India’s Patent Regime and Its Impact on Innovation in the Indian Pharmaceutical Industry’, in K.C. Liu and U.S. Racherla (eds), Innovation, Economic Development, and Intellectual Property in India and China (Singapore: Springer, 2019), pp. 271–98.

24. B.K. Keyala, ‘Amended Patents Act: A Critique’, in Combat Law, Vol. 4, no. 2 (2005) [https://indiatogether.org/combatlaw/vol4/issue2/patents.htm, accessed 2 Oct. 2021].

25. Greene, ‘The Emergence of India’s Pharmaceutical Industry and Implications for the US Generic Drug Market’, p. 2.

26. For the Ayyangar report, which reviewed India’s IPR framework in relation to its national development needs, see Shri Justice N. Rajagopala Ayyangar, ‘Report on the Revision of the Patents Law’ (1959) [http://www.delhihighcourt.nic.in/library/reports/Rajagopala_Ayyangar_Report_Report_on_patent_law.pdf, accessed 10 Sept. 2020].

27. Ibid., p. 4.

28. H. Chang, ‘Intellectual Property Rights and Economic Development: Historical Lessons and Emerging Issues’, in Journal of Human Development, Vol. 2, no. 2 (2001), pp. 287–309.

29. A. Ramanna, ‘India’s Patent Policy and Negotiations in TRIPs: Future Options for India and Other Developing Countries’, paper presented at the ‘National Conference on TRIPS–Next Agenda for Developing Countries’, Hyderabad, Oct. 2002, p. 10 [https://www.iprsonline.org/ictsd/docs/ResourcesTRIPSanita_ramanna.doc, accessed 1 Oct. 2020].

30. T.P. Stewart (ed.), The GATT Uruguay Round: A Negotiating History, 1986–1992, Vol. 2: Commentary (Deventer, the Netherlands: Kluwer Law & Taxation Publishers, 1993), p. 2258.

31. J.K. Plahe, ‘TRIPS Downhill: India’s Plant Variety Protection System and Implications for Small Farmers’, in Journal of Contemporary Asia, Vol. 41, no. 1 (2011), pp. 75–98 [78].

32. General Agreement on Tariffs and Trade, ‘Mid Term Review Agreements’, Geneva, 24 April 1989 [https://docs.wto.org/gattdocs/q/UR/NUR/027.pdf, accessed 1 Oct. 2020].

33. C.M. Correa, Intellectual Property Rights, the WTO and Developing Countries: The TRIPS Agreement and Policy Options (London/New York: Zed Books, 2000), p. 3.

34. First-line therapy is the initial treatment regime for a particular illness. Second- and third-line therapies are offered if the first line no longer works, or if it is no longer medically appropriate.

35. World Health Organization, ‘Antiretroviral Therapy’ [http://www.who.int/hiv/topics/treatment/en/index.html, accessed 13 Sept. 2020).

36. World Health Organization, ‘Monitoring the Emergence of Antiretroviral Resistance’, report of a WHO Consultation Organised in Collaboration with Istituto Superiore di Sanità and the International AIDS Society, Rome, 10–11 Oct. 2000.

37. Médecins Sans Frontières, ‘Don’t Shut Down the Pharmacy of the Developing World’ (2017) [https://msfaccess.org/dont-shut-down-pharmacy-developing-world, accessed 5 Sept. 2020].

38. S.V. Ramani and V. Mukherjee, ‘CSR and Market Changing Product Innovations: Indian Case Studies’, Working Paper Series, 2010, United Nations University, p. 12.

39. S. Guennif, ‘AIDS in India: Public Health Related Aspects of Industrial Policy and Intellectual Property Rights in a Developing Country’, Le Centre de Sciences Humaines Occasional Papers, New Delhi, 2004.

40. Ramani and Mukherjee, ‘CSR and Market Changing Product Innovations’, pp. 13–4.

41. Under a voluntary licence, the patent holder authorises a generic manufacturer to produce a patented product. The generic manufacturer usually pays the patent holder a royalty and agrees to set quality standards in order to produce the generic version.

42. J.P. Love, ‘Expert Declaration’, Consumer Project on Technology (2001) [www.cptech.org/ip/health/cl/cl-cases/rsa-tac/love02032003.doc, accessed 5 Sept. 2020], p. 12.

43. Ibid.

44. Ramani and Mukherjee, ‘CSR and Market Changing Product Innovations’, p. 14.

45. Ibid.

46. Médecins Sans Frontières, ‘Don’t Shut Down the Pharmacy of the Developing World’, p. 1.

47. Médecins Sans Frontières, ‘Untangling the Web of Antiretroviral Price Reductions’ (18th ed., 2016), p. 4.

48. Ibid., p. 11. Protease inhibitors block the HIV virus from replicating itself.

49. Médecins Sans Frontières, ‘Untangling the Web of Antiretroviral Price Reductions’ (18th ed., 2016), p. 9.

50. Mueller, ‘The Tiger Awakens’, p. 551.

51. According to Article 3(d) of India’s Patents (Amendment) Act, 2005, ‘the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant’. ‘The Gazette of India’ (New Delhi: Ministry of Law and Justice, 5 April 2005), pp. 1–18 [3] [https://ipindia.gov.in/writereaddata/Portal/IPOAct/1_69_1_patent_2005.pdf, accessed 11 Sept. 2021].

52. P. Drahos, The Global Governance of Knowledge: Patent Offices and Their Clients (Cambridge: Cambridge University Press, 2010).

53. See ‘India: The Intellectual Property Appellate Board: Power & Constitution’ (18 July 2017), p. 1 [https://www.mondaq.com/india/trademark/611548/the-intellectual-property-appellate-board-power-constitution, accessed 14 Sept. 2020].

54. K.M. Gopakumar, ‘Product Patents and Access to Medicines in India: A Critical Review of the Implementation of TRIPS Patent Regime’, in Law and Development Review, Vol. 3, no. 2 (2010), pp. 326–68.

55. Médecins Sans Frontières, ‘About the Novartis Drop the Case Campaign’ [https://www.msf.org/about-novartis-drop-case-campaign, accessed 14 Sept. 2020].

56. Ibid.

57. F. Ali et al., ‘Pharmaceutical Patent Grants in India: How Our Safeguards against Evergreening Have Failed, and Why the System Must be Reformed’ (2018) [https://accessibsa.org/media/2018/04/Pharmaceutical-Patent-Grants-in-India.pdf, accessed 14 Sept. 2020].

58. Ibid., p. 28.

59. Ibid.

60. Ibid., p. 34

61. F.A. Khader, The Access Regime: Patent Law Reforms for Affordable Medicines (Oxford: Oxford University Press, 2016), p. 82.

62. K. Alcorn, ‘India Rejects Patents on Two HIV Drugs’ (2009) [http://www.aidsmap.com/India-rejects-patents-on-two-HIV-drugs/page/1435862/, accessed 6 Sept. 2020]. This marked the first time that foreign NGOs joined Indian NGOs to contest a drug patent: see D. Butler, ‘India Says No to HIV Drug Patents’, in Nature (2009) [https://doi.org/10.1038/news.2009.882, accessed 2 Oct. 2020].

63. V. Johari et al., ‘Policy Brief on Patents and Pre-Grant Opposition in India’, Third World Network Briefing Paper 100 (June 2019), p. 6.

64. Ibid.

65. M.Z. Abbas, ‘Community-Based Patent Opposition Model in India: Access to Medicines, Right to Health and Sustainable Development’, unpublished PhD dissertation, Queensland University of Technology, Brisbane, Australia, 2020.

66. Johari et al., ‘Policy Brief on Patents and Pre-Grant Opposition in India’, p. 7.

67. World Trade Organization, ‘Amendment to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)’ [https://www.wto.org/english/tratop_e/trips_e/tripsfacsheet_e.htm, accessed 14 Sept. 2020].

68. For example, both importing and exporting members need to specify the quantity of medicines that will be supplied. Exporting members need to ensure specific labelling and marking of medicines supplied under this WTO decision: see World Trade Organization, ‘Amendment to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)’, p. 1.

69. World Trade Organization, ‘Annual Review of the Special Compulsory Licensing System: Report to the General Council, IP/C/82’ (27 Nov. 2018), p. 7.

70. Mueller, ‘The Tiger Awakens’, p. 581.

71. S. Basheer, ‘Roche vs NATCO: India’s First “Doha Style” Compulsory License?’, SpicyIP (16 Jan. 2008) [https://spicyip.com/2008/01/roche-vs-natco-indias-first-doha-style.html, accessed 18 Sept. 2020); see also Asia-Pacific Research and Training Network on Trade, ‘Compulsory Licensing: India’s Maiden Experience’, Working Paper no. 137 (Dec. 2013) [https://www.unescap.org/sites/default/files/AWP%20No.%20137.pdf, accessed 2 Oct. 2020].

72. Here, a third party is any party that is not the patent holder—usually a generic producer.

73. ‘TRIPS-plus’ denotes a provision that goes beyond what is required by TRIPS.

74. K.M. Gopakumar and P. Sivasubramanian, ‘Drugs that Could Be Used to Beat COVID-19 Have Another Barrier—Patents’, The Wire (15 May 2020) [https://thewire.in/law/remdesivir-favipravir-covid-19-patents-indian-patents-act-ustr, accessed 18 Sept. 2020].

75. Ibid.

76. Ibid.

77. S. Chaudhuri, ‘Making Covid-19 Medical Products Affordable: Voluntary Patent Pool and TRIPS Flexibilities’, South Centre (16 June 2020), p. 5 [https://www.southcentre.int/wp-content/uploads/2020/06/SouthViews-Chaudhuri.pdf, accessed 8 Sept. 2021].

78. Ibid.

79. J. Bosse et al., ‘TRIPS Waiver: There’s More to the Story than Vaccine Patents’, The Conversation (8 May 2021) [https://theconversation.com/trips-waiver-theres-more-to-the-story-than-vaccine-patents-160502, accessed 11 May 2021].

80. Ibid.

81. A. Samal, ‘SC Issues Interim Order in Suo Motu COVID-19 Case: Raises Questions on Vaccine Procurement Process, Compulsory Licensing and More’, SpicyIP (4 May 2021) [https://spicyip.com/2021/05/sc-issues-interim-order-in-suo-motu-covid-19-case-raises-questions-around-vaccine-procurement-process-compulsory-licensing-and-more.html, accessed 21 May 2021].

82. ‘Why is India Calling for a Global Vaccine Patent Waiver, but against Discussing One at Home?’, Scroll.in (13 May 2021) [https://scroll.in/article/994672/why-is-india-calling-for-a-global-vaccine-patent-waiver-but-against-discussing-one-at-home, accessed 13 May 2021].

83. R. Horner, ‘The Impact of Patents on Innovation, Technology Transfer and Health: A Pre- and Post-TRIPS Analysis of India’s Pharmaceutical Industry’, in New Political Economy, Vol. 19, no. 3 (2014), pp. 384–406 [397].

84. Ibid.

85. An ANDA contains data submitted to the US Food and Drug Administration for review of a generic drug. Applicants have to provide data which ‘scientifically demonstrates’ that their product ‘performs in the same manner as the innovator drug’. Once a product is approved, then ‘an applicant may manufacture and market the generic drug product to provide a safe, effective, lower-cost alternative to the brand-name drug it references’: see US Food and Drug Administration, ‘Abbreviated New Drug Application (ANDA)’ [https://www.fda.gov/drugs/types-applications/abbreviated-new-drug-application-anda#, accessed 8 Oct. 2020].

86. Ernst and Young, ‘Tapping into the Globally-Competitive Indian Manufacturing Opportunity’ (May 2020) [file:///Users/jagjitplahe/Downloads/tapping-into-the-globally-competitive-indian-manufacturing-opportunity%20(1).pdf, accessed 19 Sept. 2020].

87. S. Chaudhuri, ‘Multinationals and Monopolies: Pharmaceutical Industry in India after TRIPS’, in Economic & Political Weekly, Vol. 47, no. 12 (2012), pp. 46–54.

88. Horner, ‘The Impact of Patents on Innovation, Technology Transfer and Health’, p. 398.

89. Chaudhuri, ‘Multinationals and Monopolies’, pp. 46–54.

90. IBEF, ‘Indian Pharmaceutical Industry’, India Brand Equity Foundation (April 2018) [https://www.ibef.org/archives/detail/b3ZlcnZpZXcmMzc5MzImOTA=, accessed 8 Oct. 2020].

91. Chaudhuri, ‘Making Covid-19 Medical Products Affordable’, p. 5.

92. Ibid.

93. The nine firms were Cipla, Dr. Reddy’s Laboratories, Eva Pharma, Ferozsons Laboratories, Hetero Labs, Jubilant Lifesciences, Mylan, Syngene and Zydus Cadila Healthcare: see Gilead, ‘Voluntary Licensing Agreements for Remdesivir’ (2020) [https://www.gilead.com/purpose/advancing-global-health/covid-19/voluntary-licensing-agreements-for-remdesivir, accessed 6 Sept. 2020].

94. Ibid.

95. M. Halliburton, India and the Patent Wars: Pharmaceuticals in the New Intellectual Property Regime (Ithaca, NY: Cornell University Press, 2017), p. 105.

96. P. Maybarduk, ‘Remdesivir Should Be in the Public Domain; Gilead’s Licensing Deal Picks Winners and Losers’, Public Citizen (12 May 2020) [https://www.citizen.org/news/remdesivir-should-be-in-the-public-domain-gileads-licensing-deal-picks-winners-and-losers/ accessed 12 June 2021].

97. Ali et al., ‘Pharmaceutical Patent Grants in India’, p. 34.

98. For example, on 8 July 2020, Indonesia amended its compulsory licensing regulations, allowing the government to issue a compulsory licence ‘to overcome a disease that could cause a large number of deaths or significant disabilities in the short term and that constitutes a global public health emergency’: see M. Ambrizal, ‘Indonesia Adjusts Compulsory Licensing Guidelines in Preparation for Eventual COVID-19 Vaccine’ (23 July 2020), Tilleke and Gibbins [https://www.tilleke.com/insights/indonesia-adjusts-compulsory-licensing-guidelines-preparation-eventual-covid-19-vaccine/, accessed 7 Sept. 2021].